State Bank of Pakistan (SBP) Governor Dr Reza Baqir announced Thursday that the interest rates would remain unchanged at 7%.
Speaking in a press conference after the monetary policy committee’s (MPC) meeting, Dr Reza Baqir said the decision was taken keeping in mind the current situation.
The current interest rate may remain at the same level in the near future and until further improvement in the economy, he added.
“The MPC’s inflation estimates are 7-9%,” he said, warning, however, that a temporary rise in the prices of food and beverages, as well as electricity, were likely.
#MonetaryPolicy Committee decides to maintain the policy rate at 7 percent. For complete statement: https://t.co/MM53TMWkr5 pic.twitter.com/u0SeRCyZHt
— SBP (@StateBank_Pak) January 22, 2021
The SBP’s top official said the reason behind inflation was not high demand. “Things are getting better than before,” he explained. “The economy is improving and Pakistan’s monetary policy supports it.
“The improvement is still not the kind that we would like to see for our nation,” he said.
Dr Reza Baqir noted that the production capacity was not being fully utilised and that the inflation was expected to rise as electricity prices increase.
“The MPC has also given a direction to the future and the SBP has provided guidance for the future as well this time.
“Our situation is better today [and] not what it was at the time of the IMF [International Monetary Fund] programme.”